Please explain if necessary Sue has a small stall at a local market that runs ev
ID: 2438127 • Letter: P
Question
Please explain if necessary Sue has a small stall at a local market that runs every first Saturday of the month, selling dog shampoo. At the June 2018 market day, a friend of Sue’s buys shampoo worth $400. She pays Sue $300 on the spot, and Sue agrees to receive the remaining $100 at the July 2018 market day. A supplier invoices Sue for three months’ worth of stock on 30 June 2018. He delivers the stock to Sue’s stall at the July market day. Sue pays him on 14 July 2018. •What amount, if any, is returned as assessable income in Sue’s 2017-2018 income year? •What amount, if any, is allowed as a deduction in Sue’s 2017-2018 income year? The Income Tax Equation Taxable Income Assessable Income Deductions Section 6-5(2) If you are an Australian resident, your assessable income includes the ordinary income you derived directly or indirectly from all sources, whether in or out of Australia during the income year Section 8-1 | You can deduct from your assessable income any loss or outgoing to the extent that: It is incurred in gaining or producing your assessable income; or It is necessarily incurred in carrying on a business for the purpose of producing your assessable income. a. b.Explanation / Answer
In year 2017-2018,
a) Sue's assessable income would be $400 even though remaining amount of $100 has been received after june 2018, it will be considered in 2017-18 income only as accrual basis concept has been followed.
b) Sue's dedutible exepnses would be Nil.